German CPI Preview: what to expect of EUR/USD

Germany will publish its advanced inflation figures for the month of August today, with consensus expecting headline consumer prices and the broader HICP to rise at an annualized 0.5%.

In case CPI comes as forecasted, it will not only confirm the upside trend in prices in the first economy of the euro bloc, but it will also post the highest level since May 2015.

In the FX space, and barring any surprise in either direction, EUR/USD is unlikely to react to the results, as spot remains almost exclusively driven by USD-dynamics via speculations of potential Fed’s rate hike in the next months. Adding to this theme, the European Central Bank has been in an unusual silent mode as of late, while market expectations of any action at next week’s meeting remain muted.